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Lear accepts sweetened Icahn bid

July 10, 2007|From Reuters

CHICAGO — Lear Corp. on Monday accepted an increased $3-billion takeover offer from billionaire Carl Icahn, but doubts remained as to whether the auto parts maker's shareholders would support the new deal.

Icahn, Lear's biggest shareholder, raised his offer to $37.25 a share from a previous $36 that proxy advisory firms and several shareholders called too low. Just weeks ago, Icahn stood firm against raising the offer.

The bump up was not enough to sway Richard Pzena, head of Pzena Investment Management, a firm that has led opposition to the Icahn bid and plans to vote against the new offer from Icahn's American Real Estate Partners.

"We're voting against this," Pzena said in an interview. "We're not looking for an extra dollar."

Pzena, Lear's second-biggest shareholder with an 8.6% stake, believes Lear should remain independent and has maintained the company is worth $55 to $60 a share. Pzena's firm manages about $30 billion in investor assets.

Shares of Southfield, Mich.-based Lear rose 99 cents, or 2.76%, to $36.85 on Monday.

Lehman Bros. analyst Brian Johnson said Icahn's new bid was probably a reaction to the real possibility of shareholders rejecting the buyout and "unlikely to move the needle much."

"We believe the upcoming vote will still likely be a close call," Johnson said in a research note.

Lear's board has backed both the original $36-a-share offer and the $37.25 sweetened offer from Icahn, but had to delay a shareholder vote in June to try to persuade investors to give it their support as well.

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